Illustration 3:

ABC Company manufactures a product, called Tita. Relevant data for Tita are as follows.

Selling price RM20 per unit

Units Produced 30,000; sold 20,000; beginning inventory zero
Variable unit costs Manufacturing RM9 (direct materials RM5, direct labour RM3,
and variable overhead RM1)
Selling and administrative expenses RM2
Fixed costs Manufacturing overhead RM120,000
Selling and administrative expenses RM15,000

Required:
Calculate the per unit manufacturing cost under absorption costing and marginal costing.
(AC = RM13, MC = 9)

Illustration 4
The following information is available for periods 1-4 for a company:
RM
Unit selling price 10
Unit variable cost 6
Unit fixed overhead 2
The company produces only one product. Budgeted activity for each period is expected to
average 150,000 units and budgeted manufacturing fixed overheads of RM300,000. Production
and sales for each period are as follows:

Period 1 Period 2 Period 3 Period 4

Sales (000s) 150 120 160 140
Production (000s) 150 170 120 150

There were no opening stocks at the start of period 1, and the actual manufacturing fixed
overhead incurred was RM300,000 per period. The non-manufacturing overheads are
RM100,000 per period.

Required:
Prepare the profit statement for each period using
i) Absorption costing
ii) Marginal costing